An Act to provide, keeping in view of the economic

development of the country, for the establishment of a

Commission to prevent practices having adverse effect
of competition, to promote and sustain competition in
markets, to protect the interests of consumers and to
ensure freedom of trade carried on by other participants
in markets, in India, and for matters connected therewith
or incidental thereto.
 1. (1) This Act may be called the Competition Act, 2002

(2) It extends to the whole of India except the State of

Jammu and Kashmir

(3) It shall come into force on such date as the Central

Government may
The cases pending before the MRTP Commission are
transferred to Competition Commission of India
In the first phase, Competition Commission of India
undertakes the competition advocacy

In the second phase, the competition commission will

commence enquiries relating to anti-competitive
agreements and abuse of dominant position

In the third phase, the commission will commence

regulation of combinations

Law also stipulates that different dates may be

appointed for different provisions
 To issue cease & desist order

To modify the trade agreement

To grant interim relief during

the enquiry

To award compensation

To impose penalty on the guilty

To recommend division of
enterprise
Anti - Abuse of
Competition Dominance
Agreements

Combinations Competition
Regulation Advocacy
 To prohibit anti-competitive agreements (S 3)

To prohibit abuse of dominant position (S 4)

To regulate combinations (S 5 & 6)

Competition advocacy (S 49)

 3. (1) No enterprise or association of enterprises or
person or association of persons shall enter into any
agreement in respect of production, supply,
distribution, storage, acquisition or control of goods or
provision of services, which causes or is likely to
cause an appreciable adverse effect on competition
within India.
4. (1) No enterprise shall abuse its dominant position
Unfair or discriminatory condition or price (including
predatory price) in purchase or sale of goods or service
Limits or restricts Production, Technical development
Uses dominance to enter into or protect other markets
 The acquisition of one or more enterprises by one or more
persons or merger shall be a combination if
(a) any acquisition where
The parties to the acquisition, being the acquirer and the
enterprise, whose control, shares, voting rights or assets
have been acquired or are being acquired jointly have
Either, in India, the assets of the value of more than rupees
one thousand crores or turnover more than rupees three
thousand crores
In India or outside India, in aggregate, the assets of the
value of more than two billion US dollars, including at least
rupees five hundred crores in India, or turnover more than
six billion US dollars, including at least rupees fifteen
hundred crores in India
Acquiring of control by a person over an enterprise when
such person has already direct or indirect control over
another enterprise engaged in production, distribution or
trading of a similar or identical or substitutable goods or
provision of a similar or identical or substitutable service :

The enterprise over which control has been acquired along

with the enterprise over which the acquirer already has
direct or indirect control jointly have either in India, the
assets of the value of more than rupees one thousand crores
or turnover more than rupees three thousand crores
 The Central Government may, in formulating a policy on
competition (including review of laws related to competition)
or any other matter, and a State Government may, in
formulating a policy on competition or on any other matter,
as the case may be, make a reference to the Commission for
its opinion on possible effect of such policy on competition
and on the receipt of such a reference, the Commission shall,
within sixty days of making such reference, give its opinion
to the Central Government, or the State Government, as the
case may be, which may thereafter take further action as it
deems fit
 The opinion given by the Commission shall not be
binding
upon the Central Government or the State Government
in formulating such policy
The Commission shall take suitable measures for the
promotion of
competition advocacy, creating awareness and imparting
training about competition issues
The following may constitute unfair trade practices:
False representation and misleading advertisement
of goods and services
Falsely representing second hand goods as new
Misleading representation regarding usefulness,
need, quality, standard, style etc. of goods and
services
False claims regarding price of goods and services
False facts regarding sponsorship, affiliation of goods
and services
False guarantee or warrantee on goods and services
without adequate tests
 No provision for unfair trade practices
Only consumer courts having jurisdiction
Pending cases will be continued by MRTPC for 2
years
After 2 years :
All cases (except disparagement cases) will
be transferred to National Commission under
CPA
All disparagement cases will be transferred to
Competition Commission
Under MRTP Act:
Restrictive Trade Practices are not declared VOID.
Only registration formalities are to be complied with
MRTP Commission can issue notice of enquiry if
the restrictive trade practice is proved to be against
public interest
Under Competition Act
Anti competitive agreements are declared void
Per Se Rule applied to 4 horizontal agreements
Rule of Reason applied to 5 vertical agreements
 Contravention of orders of Commission

Penalty for failure to comply with directions of Commission and Director-

General

Penalty for making false statement or omission to furnish material

information

Penalty for offences in relation to furnishing of information

Power to impose lesser penalty

Crediting sums realized by way of penalties to Consolidated Fund of India

Contravention by companies
 The main objective of competition law is to promote
economic efficiency using competition as one of the
means of assisting the creation of market responsive to
consumer preferences.

The advantages of perfect competition are three-fold:

allocative efficiency, which ensures the effective
allocation of resources, productive efficiency, which
ensures that costs of production are kept at a minimum
and dynamic efficiency, which promotes innovative
practices.